CHARLOTTESVILLE, Va., July 28, 2011 (GLOBE NEWSWIRE) -- StellarOne Corporation (Nasdaq:STEL) ("StellarOne") today reported second quarter 2011 earnings of $4.0 million and net income available to common shareholders, which deducts the dividends and discount accretion on preferred stock from net income, of $3.3 million, or $0.14 net income per diluted common share. Those results compare to net income available to common shareholders of $1.1 million, or $0.05 net income per diluted common share during the same quarter in the prior year, and net income to common shareholders of $2.4 million, or $0.11 net income per diluted common share for the first quarter of 2011. Credit quality continued to improve during the second quarter, as evidenced by a favorable trend in nonperforming loans and overall nonperforming assets. The credit quality improvement resulted in a lower loan loss provision and mortgage indemnification losses, which along with increased retail banking fees and reduced FDIC insurance premiums, contributed to the growth in recurring earnings as compared to the previous quarter.
"Our second quarter results represent another step forward for our Company, as we navigate the headwinds presented by the challenging economic environment. Credit quality continued to improve during the second quarter as nonperforming loans and delinquencies both declined. All business lines performed well during the quarter despite modest demand for new loans including residential mortgage activity, a slower than expected economic recovery and a continuance of historically low interest rates. We continue to be focused on revenue creation and asset quality, as we explore strategic ways to grow our franchise." said O. R. Barham, Jr., President and Chief Executive Officer.
Second quarter 2011 highlights included:
- Non-performing asset levels decreased $4.9 million or 9.5% on a sequential quarter basis, lowering the ratio of non-performing assets as a percentage of total assets to 1.61% as of June 30, 2011, compared to 1.80% as of March 31, 2011.
- Net charge-offs as a percentage of average loans outstanding were 0.95% for the second quarter of 2011, up slightly compared to 0.88% for the first quarter of 2011.
- Net interest income on a tax-equivalent basis increased $245 thousand or 1.0% sequentially for the quarter on a slightly higher earning asset base, as the net interest margin remained relatively stable, decreasing two basis points on a sequential quarter basis.
- Pre-tax, pre-provision earnings amounted to $8.3 million for the second quarter of 2011, an increase of $347 thousand or 4.3% compared to the first quarter of 2011, and a decrease of $465 thousand or 5.3% when compared to the same period in the prior year.
- Noninterest income on an operating basis decreased 1.9% sequentially due to lower mortgage banking revenues and increased write-downs of foreclosed assets, which were offset by the absence of losses from mortgage indemnifications and an increase in retail banking fees.
- The Company redeemed 25% or 7,500 shares of its Fixed Rate Cumulative Perpetual Preferred Stock outstanding with the U.S. Department of the Treasury during the quarter. Net income available to common shareholders was reduced by $285 thousand of accelerated discount amortization in addition to dividends paid for the quarter.
Net Interest Margin Shows Continued Stability
Net interest income on a tax-equivalent basis amounted to $24.8 million for the second quarter of 2011, which compares favorably to $24.6 million for the first quarter of 2011, and $23.8 million for the same period in the prior year. The net interest margin was 3.83% for the second quarter of 2011, compared to 3.85% for the first quarter of 2011 and 3.59% for the second quarter of 2010. The average yield on earning assets for the current quarter decreased 5 basis points to 4.80% as compared to 4.85% for the first quarter of 2011, which was offset by a 3 basis point improvement in the cost of interest bearing liabilities, moving from 1.20% during the first quarter of 2011 to 1.17% during the second quarter of 2011. The re-pricing sensitivity of interest earning assets outpaced interest bearing liabilities during the second quarter as investment yields and loan yields contracted 17 basis points and 3 basis points, respectively, on a sequential basis. Investment yields have contracted due to lower yields realized on the recent investment of excess liquidity in the current low rate environment while loan yields have contracted due to repricing within the current portfolio and lower yields realized on new production. The 2 basis point improvement to the cost of funds was driven by the 2 basis point reduction in the cost of interest bearing deposits.
Operating Noninterest Income Contracts Slightly on a Sequential Basis
On an operating basis, which excludes gains and losses from sales and impairments of securities and other assets, total non-interest income amounted to $7.5 million for the second quarter of 2011, or down $153 thousand or 2.0% on a sequential basis compared to $7.7 million for the first quarter of 2011, and down $854 thousand or 10.2% compared to the same period in prior year. The sequential quarter decrease on a consolidated basis is largely attributable to a $533 thousand contraction in mortgage banking related fees and a $238 thousand increase in losses on foreclosed assets. These two reductions in noninterest income were in part offset by a $284 thousand increase in retail banking fees and a decrease of $267 thousand on losses from mortgage indemnifications. The $854 thousand decrease in operating noninterest income compared to the same quarter in the prior year stemmed from a contraction in both mortgage revenues and retail banking fees of $527 thousand and $454 thousand, respectively. These contractions were in part offset by a $471 thousand decrease in losses from mortgage indemnifications and an increase of $80 thousand in wealth management revenues.
Mortgage banking revenue totaled $1.5 million for the second quarter of 2011, or down $534 thousand or 25.9% compared to $2.1 million for the first quarter of 2011 and down $526 thousand or 25.6% when compared to the same quarter in 2010. The decrease when compared to each period was associated with comparatively higher mortgage rates resulting in reduced refinance activity. Indemnification expense posted a net recovery of $2 thousand for the second quarter, down $267 thousand or greater than 100% compared to the $265 thousand realized during the first quarter of 2011 and down $471 thousand or greater than 100% compared to the same quarter in 2010.
Retail banking fee income amounted to $3.8 million for the second quarter of 2011, an increase of $284 thousand or 8.0% compared to $3.6 million for the first quarter of 2011. This sequential quarter increase was attributable to an increase of $136 thousand and $137 thousand in consumer NSF revenue and debit card interchange income, respectively.
Wealth management revenues from trust and brokerage fees for the second quarter of 2011 were $1.4 million or up $14 thousand or 1.0% on a sequential quarter basis and up $82 thousand or 6.5% when compared to the $1.3 million realized during the second quarter of 2010. Higher fee realizations attributed to the revenue increase. Fiduciary assets decreased $16.0 million sequentially to $450.6 million, compared to $466.6 million at March 31, 2011.
Credit Quality Continues To Improve
Credit quality continued to improve during the second quarter. Favorable trends were noted in both nonperforming loans and delinquencies. StellarOne's non-performing assets totaled $47.3 million at June 30, 2011, down $4.9 million or 9.5% from $52.2 million at March 31, 2011 and down $23.3 million or 33.0% compared to $70.6 million at June 30, 2010. The ratio of non-performing assets as a percentage of total assets decreased sequentially to 1.61% as of June 30, 2011, compared to 1.80% as of March 31, 2011 and 2.36% at June 30, 2010.
Non-performing loans decreased $5.1 million or 11.7% on a sequential quarter basis to $38.1 million at June 30, 2011, when compared to $43.2 million at March 31, 2011 and were down $26.5 million or 41.0% compared to $64.6 million at June 30, 2010. Of the $38.1 million in total non-performing loans, 34.5% or $13.2 million are consumer real estate loans, 30.6% or $11.6 million are construction and land development loans and 23.7% or $9.0 million are commercial real estate loans. Foreclosed assets totaled $9.1 million at June 30, 2011 or essentially flat compared to $9.0 million at March 31, 2011 and up 53.7% compared to $6.0 million as of June 30, 2010. Past due and matured loans between 30 and 89 days were down for the second quarter in a row and totaled $38.5 million at June 30, 2011, down $3.3 million or 7.9% compared to $41.8 million at March 31, 2011. Troubled debt restructurings amounted to $48.0 million at June 30, 2011, an increase of $2.6 million as compared to $45.4 million at March 31, 2011. Of the total restructurings, $39.6 million are on accrual status, and $29.8 million represent residential consumer real estate loans under a mortgage modification program.
Annualized net charge-offs as a percentage of average loans receivable amounted to 0.95% for the second quarter of 2011, up slightly compared to 0.88% for the first quarter of 2011 results and down from 1.19% for the second quarter of 2010. Net charge-offs for the second quarter of 2011 totaled $4.9 million or up $303 thousand compared to the $4.6 million realized during the first quarter of 2011 and down $1.5 million when compared to $6.5 million during the second quarter of 2010.
StellarOne recorded a provision for loan losses of $3.2 million for the second quarter of 2011, a decrease of $1.4 million compared to the $4.5 million recognized for the first quarter of 2011 and a decrease of $4.2 million compared to the second quarter of 2010. The second quarter 2011 provision compares to net charge-offs of $4.9 million, resulting in an allowance for loan losses of $35.7 million at June 30, 2011, a decrease of $1.8 million when compared to $37.5 million at March 31, 2011. The allowance as a percentage of total loans was 1.74% at June 30, 2011, down eight basis points when compared to 1.82% at March 31, 2011. The allowance as a percentage of non-performing loans improved to 93.8% at June 30, 2011, or up 6.9% when compared to 86.9% at March 31, 2011.
Efficiency Ratio Decreases Sequentially
StellarOne's efficiency ratio was 70.0% for the second quarter of 2011, compared to 71.4% for the first quarter of 2011 and 69.1% for the same quarter in 2010. The sequential quarter decrease in the efficiency ratio reflects a slight decrease in noninterest expense and a slight increase in total revenue. Non-interest expense for the second quarter amounted to $23.2 million, or down $316 thousand or 1.3% when compared to $23.5 million for the first quarter of 2011 and up $429 thousand or 1.9% when compared to the second quarter in 2010. The sequential quarter decrease in noninterest expense was driven by decreases of $236 thousand in FDIC insurance expense, $89 thousand in occupancy costs and $51 thousand in compensation and benefits, which were offset by a $126 thousand increase in supplies and equipment related expenses. FDIC insurance expense is expected to be consistent with second quarter amounts on a go forward basis. The decrease in compensation and benefits expense is somewhat related to the lower mortgage volume and will be dependent on future volume.
The increase relative to same quarter in 2010 can be attributed to a $1.2 million or 10.9% increase in compensation and benefits, partly offset by decreases in occupancy costs, FDIC insurance and professional fees. The compensation and benefit increase is related to efforts to build human capital in key management positions over the past eighteen months, and the reestablishment of incentive plans for revenue producing units. This line item is being closely managed through multiple company-wide initiatives that management believes will result in future cost savings.
Capital Position Remains Strong Subsequent to Partial TARP Repayment
StellarOne's risk-based capital ratios substantially exceed regulatory standards for well-capitalized banks. The period-end tangible common equity ratio was 10.11% at June 30, 2011 compared to 10.08% at March 31, 2011. Tier 1 risk-based and total risk-based capital ratios were 15.91% and 17.17%, respectively, at June 30, 2011 compared to 14.88% and 16.14% at March 31, 2011. For comparative purposes, excluding the 7,500 shares redeemed in April 2011, the period-end tangible common equity ratio, tier 1 risk-based and total risk-based capital ratios would have been 9.81%, 14.55% and 15.80%, respectively, at March 31, 2011. Excluding the remaining $22.5 million in preferred stock still outstanding in connection with participation in the TARP program, StellarOne's Tier 1 risk-based capital ratio was 14.85% compared to 13.56% at March 31, 2011. Shareholders' equity, excluding the preferred stock, represented 13.7% of total assets at June 30, 2011, while book value per common share was $17.73 per share.
Balance Sheet Expands Slightly While Loan Demand Remains Soft
Period end loans decreased $6.6 million as compared to the first quarter 2011, while average loans for the second quarter of 2011 were $2.08 billion, or down approximately 1.2% when compared to $2.10 billion for the first quarter of 2011. Average securities were $403.2 million for the second quarter, up $44.2 million or 12.3% from $359.0 million for the first quarter of 2011, reflecting increased investment activity driven by excess liquidity during the quarter. Average deposits for the second quarter of 2011 were $2.39 billion or up $29.7 million or 1.3% on a sequential quarter basis compared to $2.36 billion for the first quarter of 2011. Average interest bearing deposits increased sequentially by approximately $20.3 million, while average non-interest bearing deposits decreased approximately $9.4 million. At June 30, 2011, total assets were $2.94 billion, compared to $2.90 billion at March 31, 2011. Cash and cash equivalents were $134.0 million at June 30, 2011, a decrease of $44.4 million or 24.9% compared to $178.4 million at March 31, 2011. This decrease reflects an effort to invest excess liquidity during the quarter as the demand for new lending has remained soft.
About StellarOne
StellarOne Corporation is a traditional community bank, offering a full range of business and consumer banking services, including trust and wealth management services. Through the activities of its sole subsidiary, StellarOne Bank, StellarOne operates 56 full-service financial centers, one loan production office, and a suite of ATMs serving the New River Valley, Roanoke Valley, Shenandoah Valley, and Central and North Central Virginia.
Earnings Webcast
To hear a live webcast of StellarOne's second quarter 2011 earnings conference call at 10:00 a.m. (EDT) on July 28, 2011, please visit our website at www.StellarOne.com and click on the Investor Relations section for detailed instructions on how to participate. Replays of the conference call will be available from 1:00 p.m. (EDT) on Thursday, July 28, 2011 through 11:59 PM (EDT) on Thursday, August 4, 2011, by dialing toll free (800) 642-1687 and using passcode #82027255.
Non-GAAP Financial Measures
This report refers to the efficiency ratio, which is computed by dividing non-interest expense less amortization of intangibles, foreclosed property expense and goodwill impairments as a percent of the sum of net interest income on a tax equivalent basis and non-interest income excluding only gains on securities. Comparison of our efficiency ratio or operating earnings with those of other companies may not be possible because other companies may calculate them differently. It also refers to operating earnings, which reflects net income adjusted for non-recurring expenses associated with mergers, asset gains and losses or expenses that are unusual in nature. Pre-tax, pre-provision earnings, which adds back provision and tax expense to net income, is used to demonstrate a more representative comparison of operational performance without the volatility of credit quality that is typically present in times of economic stress. The tangible common equity and Tier 1 common equity ratios are used by management to assess the quality of capital and management believes that investors may find them useful in their analysis of the company. These capital measures are not necessarily comparable to similar capital measures that may be presented by other companies. Such information is not in accordance with generally accepted accounting principles in the United States ("GAAP") and should not be construed as such. These are non-GAAP financial measures that we believe provide investors with important information regarding our operational efficiency. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information should not be viewed as a substitute for GAAP. StellarOne, in referring to its net income, is referring to income under GAAP.
Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results, or those anticipated. When we use words such as "believes," "expects," "anticipates" or similar expressions, we are making forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date thereof. StellarOne wishes to caution the reader that factors, such as those listed below, in some cases have affected and could affect StellarOne's actual results, causing actual results to differ materially from those in any forward-looking statement. These factors include: (i) expected cost savings from StellarOne's acquisitions and dispositions, (ii) competitive pressure in the banking industry or in StellarOne's markets may increase significantly, (iii) changes in the interest rate environment may reduce margins, (iv) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, credit quality deterioration, (v) changes may occur in banking legislation and regulation, (vi) changes may occur in general business conditions, (vii) changes may occur in the securities markets, and (viii) the impact of governmental restrictions on entities participating in the US Treasury Department Capital Purchase Program. Please refer to StellarOne's filings with the Securities and Exchange Commission for additional information, which may be accessed at www.StellarOne.com.
NOTE: Risk-based capital ratios are preliminary.
| SELECTED FINANCIAL DATA (UNAUDITED) | ||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| SUMMARY INCOME STATEMENT | Three Months Ended June | Six Months Ended June | ||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Interest income - taxable equivalent | $ 31,147 | $ 32,755 | $ 62,167 | $ 65,851 | ||||
| Interest expense | 6,326 | 8,932 | 12,769 | 18,914 | ||||
| Net interest income - taxable equivalent | 24,821 | 23,823 | 49,398 | 46,937 | ||||
| Less: taxable equivalent adjustment | 778 | 605 | 1,493 | 1,220 | ||||
| Net interest income | 24,043 | 23,218 | 47,905 | 45,717 | ||||
| Provision for loan and lease losses | 3,150 | 7,350 | 7,650 | 14,050 | ||||
| Net interest income after provision for loan and lease losses | 20,893 | 15,868 | 40,255 | 31,667 | ||||
| Noninterest income | 7,521 | 8,380 | 15,191 | 17,195 | ||||
| Noninterest expense | 23,220 | 22,791 | 46,755 | 45,338 | ||||
| Income tax expense (benefit) | 1,169 | (96) | 1,794 | 116 | ||||
| Net income | 4,025 | 1,553 | 6,897 | 3,408 | ||||
| Dividends and accretion on preferred stock | (720) | (465) | (1,186) | (923) | ||||
| Net income available to common shareholders | $ 3,305 | $ 1,088 | $ 5,711 | $ 2,485 | ||||
| Earnings per share available to common shareholders | ||||||||
| Basic | $ 0.15 | $ 0.05 | $ 0.25 | $ 0.11 | ||||
| Diluted | $ 0.14 | $ 0.05 | $ 0.25 | $ 0.11 | ||||
| SUMMARY AVERAGE BALANCE SHEET | Three Months Ended June | Six Months Ended June | ||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Total loans | $ 2,077,768 | $ 2,168,536 | $ 2,090,827 | $ 2,186,318 | ||||
| Total securities | 403,216 | 372,921 | 381,244 | 369,259 | ||||
| Total earning assets | 2,601,135 | 2,664,297 | 2,596,339 | 2,665,572 | ||||
| Total assets | 2,918,346 | 2,984,954 | 2,914,316 | 2,991,928 | ||||
| Total deposits | 2,388,295 | 2,392,502 | 2,373,503 | 2,394,933 | ||||
| Shareholders' equity | 425,281 | 425,043 | 426,500 | 423,659 | ||||
| PERFORMANCE RATIOS | Three Months Ended June | Six Months Ended June | ||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Return on average assets | 0.55% | 0.21% | 0.48% | 0.23% | ||||
| Return on average equity | 3.80% | 1.47% | 3.26% | 1.62% | ||||
| Return on average realized equity (A) | 3.83% | 1.49% | 3.30% | 1.64% | ||||
| Net interest margin (taxable equivalent) | 3.83% | 3.59% | 3.84% | 3.55% | ||||
| Efficiency (taxable equivalent) (B) | 69.96% | 69.08% | 70.70% | 69.28% | ||||
| CAPITAL MANAGEMENT | June 30, | |||||||
| 2011 | 2010 | |||||||
| Tier 1 risk-based capital ratio | 15.91% | 13.95% | ||||||
| Tangible equity ratio | 10.89% | 10.62% | ||||||
| Tangible common equity ratio | 10.11% | 9.57% | ||||||
| Period end shares issued and outstanding | 22,800,401 | 22,742,034 | ||||||
| Book value per common share | 17.73 | 17.39 | ||||||
| Tangible book value per common share | 12.13 | 12.06 | ||||||
| Three Months Ended June | Six Months Ended June | |||||||
| 2011 | 2010 | 2011 | 2010 | |||||
| Shares issued | 24,668 | 57,218 | 52,339 | 80,909 | ||||
| Average common shares issued and outstanding | 22,792,342 | 22,716,350 | 22,777,045 | 22,695,536 | ||||
| Average diluted common shares issued and outstanding | 22,860,299 | 22,785,511 | 22,851,336 | 22,758,404 | ||||
| Cash dividends paid per common share | $ 0.04 | $ 0.04 | $ 0.08 | $ 0.08 | ||||
| SUMMARY ENDING BALANCE SHEET | June 30, | |||||||
| 2011 | 2010 | |||||||
| Total loans | $ 2,058,153 | $ 2,128,003 | ||||||
| Total securities | 461,236 | 413,141 | ||||||
| Total earning assets | 2,613,526 | 2,669,388 | ||||||
| Total assets | 2,935,441 | 2,987,785 | ||||||
| Total deposits | 2,404,153 | 2,387,496 | ||||||
| Shareholders' equity | 426,006 | 425,440 | ||||||
| OTHER DATA | ||||||||
| End of period full time equivalent employees | 838 | 830 | ||||||
| NOTES: | ||||||||
| (A) Excludes the effect on average stockholders' equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense. | ||||||||
| (B) Computed by dividing non-interest expense less amortization of intangibles, foreclosed asset expense and goodwill impairments by the sum of net interest income on a fully tax equivalent basis and non-interest income excluding only gains on securities. This is a non-GAAP financial measure, which we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible, because other companies may calculate the efficiency ratio differently. | ||||||||
| (C) Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above. | ||||||||
| QUARTERLY PERFORMANCE SUMMARY (UNAUDITED) | ||||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||
| (Dollars in thousands) | ||||||||||
| CREDIT QUALITY | Three Months Ended June | Six Months Ended June | ||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||
| Allowance for loan losses: | ||||||||||
| Beginning of period | $ 37,519 | $ 40,644 | $ 37,649 | $ 40,172 | ||||||
| Provision for loan losses | 3,150 | 7,350 | 7,650 | 14,050 | ||||||
| Charge-offs | (5,820) | (7,154) | (10,799) | (13,862) | ||||||
| Recoveries | 887 | 685 | 1,236 | 1,165 | ||||||
| Net charge-offs | (4,933) | (6,469) | (9,563) | (12,697) | ||||||
| End of period | $ 35,736 | $ 41,525 | $ 35,736 | $ 41,525 | ||||||
| Accruing Troubled Debt Restructurings | $ 39,633 | $ 33,918 | ||||||||
| Loans greater than 90 days past due still accruing | $ 1 | $ 2,383 | ||||||||
| June 30, | ||||||||||
| 2011 | 2010 | |||||||||
| Non accrual loans | $ 29,759 | $ 62,022 | ||||||||
| Non accrual TDR's | 8,355 | 2,595 | ||||||||
| Total non-performing loans | 38,114 | 64,617 | ||||||||
| Foreclosed assets | 9,149 | 5,953 | ||||||||
| Total non-performing assets | $ 47,263 | $ 70,570 | ||||||||
| Nonperforming assets as a % of total assets | 1.61% | 2.36% | ||||||||
| Nonperforming assets as a % of loans plus foreclosed assets | 2.29% | 3.31% | ||||||||
| Allowance for loan losses as a % of total loans | 1.74% | 1.95% | ||||||||
| Net charge-offs as a % of average loans outstanding - 3 months | 0.95% | 1.19% | ||||||||
| Net charge-offs as a % of average loans outstanding - year to date | 0.91% | 1.16% | ||||||||
| June 30, 2011 | ||||||||||
|
Loans Outstanding |
Nonaccrual Loans |
Nonaccrual Loans to Loans Outstanding |
||||||||
| Construction and land development: | ||||||||||
| Commercial | 172,244 | 10,369 | 6.02% | |||||||
| Residential | 56,649 | 1,275 | 2.25% | |||||||
| Total construction and land development | 228,893 | 11,644 | 5.09% | |||||||
| Commercial real estate: | ||||||||||
| Commercial real estate - owner occupied | 330,874 | 4,952 | 1.50% | |||||||
| Commercial real estate - non-owner occupied | 396,743 | 1,984 | 0.50% | |||||||
| Farmland | 17,034 | 1,771 | 10.40% | |||||||
| Multifamily, nonresidential and junior liens | 101,785 | 315 | 0.31% | |||||||
| Total commercial real estate | 846,436 | 9,022 | 1.07% | |||||||
| Consumer real estate: | ||||||||||
| Home equity lines | 267,338 | 3,475 | 1.30% | |||||||
| Secured by 1-4 family residential, secured by first deeds of trust | 450,613 | 8,527 | 1.89% | |||||||
| Secured by 1-4 family residential, secured by second deeds of trust | 43,640 | 1,157 | 2.65% | |||||||
| Total consumer real estate | 761,590 | 13,159 | 1.73% | |||||||
| Commercial and industrial loans (except those secured by real estate) | 192,725 | 4,228 | 2.19% | |||||||
| Consumer and other: | ||||||||||
| Consumer installment loans | 23,476 | -- | 0.00% | |||||||
| Deposit overdrafts | 3,387 | -- | 0.00% | |||||||
| All other loans | 1,646 | 61 | 3.70% | |||||||
| Total consumer and other | 28,509 | 61 | 0.21% | |||||||
| Total loans | 2,058,153 | 38,114 | 1.85% | |||||||
| QUARTERLY PERFORMANCE SUMMARY (UNAUDITED) | ||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| (Dollars in thousands, except per share data) | ||||||
| SELECTED BALANCE SHEET DATA | 6/30/2011 | 6/30/2010 |
Percent Increase (Decrease) |
|||
| Assets | ||||||
| Cash and cash equivalents | $ 134,038 | $ 126,280 | 6.14% | |||
| Securities available for sale | 461,236 | 413,141 | 11.64% | |||
| Mortgage loans held for sale | 20,119 | 42,265 | -52.40% | |||
| Loans: | ||||||
| Construction and land development | 228,893 | 259,673 | -11.85% | |||
| Commercial real estate | 846,436 | 852,832 | -0.75% | |||
| Consumer real estate | 761,590 | 779,488 | -2.30% | |||
| Commercial and industrial loans (except those secured by real estate) | 192,725 | 200,388 | -3.82% | |||
| Consumer and other | 28,509 | 35,623 | -19.97% | |||
| Total loans | 2,058,153 | 2,128,003 | -3.28% | |||
| Deferred loan costs | 651 | 940 | -30.74% | |||
| Allowance for loan losses | (35,736) | (41,525) | -13.94% | |||
| Net loans | 2,023,068 | 2,087,418 | -3.08% | |||
| Premises and equipment, net | 76,707 | 80,129 | -4.27% | |||
| Core deposit intangibles, net | 5,837 | 7,487 | -22.04% | |||
| Goodwill | 113,652 | 113,652 | 0.00% | |||
| Bank owned life insurance | 31,758 | 30,846 | 2.96% | |||
| Foreclosed assets | 9,149 | 5,953 | 53.69% | |||
| Other assets | 59,877 | 80,614 | -25.72% | |||
| Total assets | 2,935,441 | 2,987,785 | -1.75% | |||
| Liabilities | ||||||
| Deposits: | ||||||
| Noninterest bearing deposits | 313,464 | 303,409 | 3.31% | |||
| Money market & interest checking | 1,009,534 | 963,962 | 4.73% | |||
| Savings | 275,480 | 232,134 | 18.67% | |||
| CD's and other time deposits | 805,675 | 887,991 | -9.27% | |||
| Total deposits | 2,404,153 | 2,387,496 | 0.70% | |||
| Federal funds purchased and securities | ||||||
| sold under agreements to repurchase | 1,144 | 1,040 | 10.00% | |||
| Federal Home Loan Bank advances | 60,000 | 120,000 | -50.00% | |||
| Subordinated debt | 32,991 | 32,991 | 0.00% | |||
| Other liabilities | 11,147 | 20,818 | -46.45% | |||
| Total liabilities | 2,509,435 | 2,562,345 | -2.06% | |||
| Stockholders' equity | ||||||
| Preferred stock | 21,725 | 28,577 | -23.98% | |||
| Common stock | 22,800 | 22,742 | 0.26% | |||
| Additional paid-in capital | 270,656 | 269,630 | 0.38% | |||
| Retained earnings | 105,063 | 97,606 | 7.64% | |||
| Accumulated other comprehensive income, net | 5,762 | 6,885 | -16.31% | |||
| Total stockholders' equity | 426,006 | 425,440 | 0.13% | |||
| Total liabilities and stockholders' equity | $ 2,935,441 | $ 2,987,785 | -1.75% | |||
| QUARTERLY PERFORMANCE SUMMARY (UNAUDITED) | ||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| (Dollars in thousands) | ||||||
| For the three months ended | ||||||
| 6/30/2011 | 6/30/2010 |
Percent Increase (Decrease) |
||||
| Interest Income | ||||||
| Loans, including fees | $ 27,084 | $ 28,850 | -6.12% | |||
| Federal funds sold and deposits in other banks | 64 | 70 | -8.57% | |||
| Investment securities: | ||||||
| Taxable | 1,824 | 2,170 | -15.94% | |||
| Tax-exempt | 1,397 | 1,029 | 35.76% | |||
| Dividends | -- | 31 | -100.00% | |||
| Total interest income | 30,369 | 32,150 | -5.54% | |||
| Interest Expense | ||||||
| Deposits | 5,533 | 7,603 | -27.23% | |||
| Federal funds purchased and securities sold under agreements to repurchase | 9 | 7 | 28.57% | |||
| Federal Home Loan Bank advances and other borrowings | 518 | 1,059 | -51.09% | |||
| Subordinated debt | 266 | 263 | 1.14% | |||
| Total interest expense | 6,326 | 8,932 | -29.18% | |||
| Net interest income | 24,043 | 23,218 | 3.55% | |||
| Provision for loan losses | 3,150 | 7,350 | -57.14% | |||
| Net interest income after provision for loan losses | 20,893 | 15,868 | 31.67% | |||
| Noninterest Income | ||||||
| Retail banking fees | 3,840 | 4,294 | -10.57% | |||
| Commissions and fees from fiduciary activities | 847 | 845 | 0.24% | |||
| Brokerage fee income | 506 | 426 | 18.78% | |||
| Mortgage banking-related fees | 1,531 | 2,058 | -25.61% | |||
| Gains (losses) on mortgage indemnifications and repurchases | 2 | (469) | > 100% | |||
| Gains on sale of premises and equipment | 3 | -- | N/A | |||
| Gains on securities available for sale | 11 | 19 | -42.11% | |||
| Losses / impairments on foreclosed assets | (366) | (210) | 74.29% | |||
| Income from bank owned life insurance | 323 | 327 | -1.22% | |||
| Other operating income | 824 | 1,090 | -24.40% | |||
| Total noninterest income | 7,521 | 8,380 | -10.25% | |||
| Noninterest Expense | ||||||
| Compensation and employee benefits | 12,304 | 11,096 | 10.89% | |||
| Net occupancy | 1,984 | 2,040 | -2.75% | |||
| Supplies and equipment | 2,333 | 2,152 | 8.41% | |||
| Amortization-intangible assets | 413 | 413 | 0.00% | |||
| Marketing | 258 | 319 | -19.12% | |||
| State franchise taxes | 594 | 554 | 7.22% | |||
| FDIC insurance | 641 | 1,322 | -51.51% | |||
| Data processing | 664 | 565 | 17.52% | |||
| Professional fees | 599 | 741 | -19.16% | |||
| Telecommunications | 439 | 420 | 4.52% | |||
| Other operating expenses | 2,991 | 3,169 | -5.62% | |||
| Total noninterest expense | 23,220 | 22,791 | 1.88% | |||
| Income before income taxes | 5,194 | 1,457 | > 100% | |||
| Income tax expense (benefit) | 1,169 | (96) | > 100% | |||
| Net income | $ 4,025 | $ 1,553 | > 100% | |||
| QUARTERLY PERFORMANCE SUMMARY | |||
| STELLARONE CORPORATION (NASDAQ: STEL) | |||
| (Dollars in thousands) | |||
|
For the six months ended |
|||
| 6/30/2011 | 6/30/2010 |
Percent Increase (Decrease) |
|
| Interest Income | |||
| Loans, including fees | $ 54,347 | $ 57,936 | -6.19% |
| Federal funds sold and deposits in other banks | 133 | 131 | 1.53% |
| Investment securities: | |||
| Taxable | 3,544 | 4,428 | -19.96% |
| Tax-exempt | 2,650 | 2,076 | 27.65% |
| Dividends | -- | 60 | -100.00% |
| Total interest income | 60,674 | 64,631 | -6.12% |
| Interest Expense | |||
| Deposits | 11,067 | 16,210 | -31.73% |
| Federal funds purchased and securities sold under agreements to repurchase | 16 | 13 | 23.08% |
| Federal Home Loan Bank advances and other borrowings | 1,158 | 2,169 | -46.61% |
| Subordinated debt | 528 | 522 | 1.15% |
| Total interest expense | 12,769 | 18,914 | -32.49% |
| Net interest income | 47,905 | 45,717 | 4.79% |
| Provision for loan losses | 7,650 | 14,050 | -45.55% |
| Net interest income after provision for loan losses | 40,255 | 31,667 | 27.12% |
| Noninterest Income | |||
| Retail banking fees | 7,396 | 8,214 | -9.96% |
| Commissions and fees from fiduciary activities | 1,751 | 1,678 | 4.35% |
| Brokerage fee income | 941 | 785 | 19.87% |
| Mortgage banking-related fees | 3,596 | 4,051 | -11.23% |
| Gain on sale of financial center | -- | 748 | -100.00% |
| Losses on mortgage indemnifications and repurchases | (263) | (602) | -56.31% |
| Gains on sale of premises and equipment | 3 | 27 | -88.89% |
| Gains on securities available for sale | 21 | 321 | -93.46% |
| Losses / impairments on foreclosed assets | (495) | (441) | 12.24% |
| Income from bank owned life insurance | 642 | 651 | -1.38% |
| Other operating income | 1,599 | 1,763 | -9.30% |
| Total noninterest income | 15,191 | 17,195 | -11.65% |
| Noninterest Expense | |||
| Compensation and employee benefits | 24,659 | 22,406 | 10.06% |
| Net occupancy | 4,057 | 4,219 | -3.84% |
| Supplies and equipment | 4,540 | 4,330 | 4.85% |
| Amortization-intangible assets | 825 | 825 | 0.00% |
| Marketing | 584 | 473 | 23.47% |
| State franchise taxes | 1,192 | 1,108 | 7.58% |
| FDIC insurance | 1,518 | 2,432 | -37.58% |
| Data processing | 1,299 | 1,108 | 17.24% |
| Professional fees | 1,231 | 1,416 | -13.06% |
| Telecommunications | 815 | 846 | -3.66% |
| Other operating expenses | 6,035 | 6,175 | -2.27% |
| Total noninterest expense | 46,755 | 45,338 | 3.13% |
| Income before income taxes | 8,691 | 3,524 | > 100% |
| Income tax expense | 1,794 | 116 | > 100% |
| Net income | $ 6,897 | $ 3,408 | > 100% |
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (UNAUDITED) | ||||||||||||
| THREE MONTHS ENDED JUNE 30, 2011 AND 2010 | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| For the Three Months Ended June 30, | ||||||||||||
| 2011 | 2010 | |||||||||||
| Dollars in thousands |
Average Balance |
Interest Inc/Exp |
Average Rates |
Average Balance |
Interest Inc/Exp |
Average Rates |
||||||
| Assets | ||||||||||||
| Loans receivable, net (1) | $ 2,077,768 | $ 27,110 | 5.23% | $ 2,168,536 | $ 28,901 | 5.35% | ||||||
| Investment securities | ||||||||||||
| Taxable | 258,042 | 1,824 | 2.80% | 268,782 | 2,201 | 3.24% | ||||||
| Tax exempt (1) | 145,174 | 2,149 | 5.86% | 104,139 | 1,583 | 6.01% | ||||||
| Total investments | 403,216 | 3,973 | 3.90% | 372,921 | 3,784 | 4.01% | ||||||
| Interest bearing deposits | 100,578 | 52 | 0.20% | 60,854 | 30 | 0.20% | ||||||
| Federal funds sold | 19,573 | 12 | 0.24% | 61,986 | 40 | 0.26% | ||||||
| 523,367 | 4,037 | 3.05% | 495,761 | 3,854 | 3.07% | |||||||
| Total earning assets | 2,601,135 | $ 31,147 | 4.80% | 2,664,297 | $ 32,755 | 4.93% | ||||||
| Total nonearning assets | 317,211 | 320,657 | ||||||||||
| Total assets | $ 2,918,346 | $ 2,984,954 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing deposits | ||||||||||||
| Interest checking | $ 568,142 | $ 530 | 0.37% | $ 571,920 | $ 902 | 0.63% | ||||||
| Money market | 426,031 | 1,053 | 0.99% | 389,863 | 1,120 | 1.15% | ||||||
| Savings | 276,589 | 415 | 0.60% | 224,076 | 482 | 0.86% | ||||||
| Time deposits: | ||||||||||||
| Less than $100,000 | 539,493 | 2,282 | 1.70% | 615,084 | 3,311 | 2.16% | ||||||
| $100,000 and more | 265,441 | 1,253 | 1.89% | 290,634 | 1,788 | 2.47% | ||||||
| Total interest-bearing deposits | 2,075,696 | 5,533 | 1.07% | 2,091,577 | 7,603 | 1.46% | ||||||
| Federal funds purchased and securities sold under agreements to repurchase | 1,155 | 9 | 3.08% | 950 | 7 | 2.91% | ||||||
| Federal Home Loan Bank advances and other borrowings | 60,000 | 518 | 3.42% | 122,913 | 1,059 | 3.41% | ||||||
| Subordinated debt | 32,991 | 266 | 3.19% | 32,991 | 263 | 3.15% | ||||||
| 94,146 | 793 | 3.33% | 156,854 | 1,329 | 3.35% | |||||||
| Total interest-bearing liabilities | 2,169,842 | 6,326 | 1.17% | 2,248,431 | 8,932 | 1.59% | ||||||
| Total noninterest-bearing liabilities | 323,223 | 311,480 | ||||||||||
| Total liabilities | 2,493,065 | 2,559,911 | ||||||||||
| Stockholders' equity | 425,281 | 425,043 | ||||||||||
| Total liabilities and stockholders' equity | $ 2,918,346 | $ 2,984,954 | ||||||||||
| Net interest income (tax equivalent) | $ 24,821 | $ 23,823 | ||||||||||
| Average interest rate spread | 3.63% | 3.34% | ||||||||||
| Interest expense as percentage of average earning assets | 0.98% | 1.34% | ||||||||||
| Net interest margin | 3.83% | 3.59% | ||||||||||
| (1) Income and yields are reported on a taxable equivalent basis using a 35% tax rate. | ||||||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||||||
| CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES (UNAUDITED) | ||||||||||||
| SIX MONTHS ENDED JUNE 30, 2011 AND 2010 | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| For the Six Months Ended June 30, | ||||||||||||
| 2011 | 2010 | |||||||||||
| Dollars in thousands |
Average Balance |
Interest Inc/Exp |
Average Rates |
Average Balance |
Interest Inc/Exp |
Average Rates |
||||||
| Assets | ||||||||||||
| Loans receivable, net (1) | $ 2,090,827 | $ 54,413 | 5.25% | $ 2,186,318 | $ 58,038 | 5.35% | ||||||
| Investment securities | ||||||||||||
| Taxable | 243,954 | 3,544 | 2.89% | 264,353 | 4,488 | 3.38% | ||||||
| Tax exempt (1) | 137,290 | 4,077 | 5.91% | 104,906 | 3,194 | 6.06% | ||||||
| Total investments | 381,244 | 7,621 | 3.98% | 369,259 | 7,682 | 4.14% | ||||||
| Interest bearing deposits | 88,875 | 89 | 0.20% | 52,503 | 58 | 0.22% | ||||||
| Federal funds sold | 35,393 | 44 | 0.25% | 57,492 | 73 | 0.25% | ||||||
| 505,512 | 7,754 | 3.05% | 479,254 | 7,813 | 3.24% | |||||||
| Total earning assets | 2,596,339 | $ 62,167 | 4.83% | 2,665,572 | $ 65,851 | 4.98% | ||||||
| Total nonearning assets | 317,977 | 326,356 | ||||||||||
| Total assets | $ 2,914,316 | $ 2,991,928 | ||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing deposits | ||||||||||||
| Interest checking | $ 563,792 | $ 1,064 | 0.38% | $ 565,395 | $ 2,234 | 0.80% | ||||||
| Money market | 423,133 | 2,094 | 1.00% | 391,046 | 2,414 | 1.24% | ||||||
| Savings | 272,743 | 883 | 0.65% | 212,136 | 931 | 0.89% | ||||||
| Time deposits: | ||||||||||||
| Less than $100,000 | 541,117 | 4,525 | 1.69% | 629,318 | 6,887 | 2.21% | ||||||
| $100,000 and more | 264,809 | 2,501 | 1.90% | 301,406 | 3,744 | 2.50% | ||||||
| Total interest-bearing deposits | 2,065,594 | 11,067 | 1.08% | 2,099,301 | 16,210 | 1.56% | ||||||
| Federal funds purchased and securities sold under agreements to repurchase | 1,099 | 16 | 2.90% | 906 | 13 | 2.85% | ||||||
| Federal Home Loan Bank advances and other borrowings | 69,945 | 1,158 | 3.29% | 125,028 | 2,169 | 3.45% | ||||||
| Subordinated debt | 32,991 | 528 | 3.18% | 32,991 | 522 | 3.15% | ||||||
| 104,035 | 1,702 | 3.25% | 158,925 | 2,704 | 3.38% | |||||||
| Total interest-bearing liabilities | 2,169,629 | 12,769 | 1.18% | 2,258,226 | 18,914 | 1.69% | ||||||
| Total noninterest-bearing liabilities | 318,187 | 310,043 | ||||||||||
| Total liabilities | 2,487,816 | 2,568,269 | ||||||||||
| Stockholders' equity | 426,500 | 423,659 | ||||||||||
| Total liabilities and stockholders' equity | $ 2,914,316 | $ 2,991,928 | ||||||||||
| Net interest income (tax equivalent) | $ 49,398 | $ 46,937 | ||||||||||
| Average interest rate spread | 3.64% | 3.29% | ||||||||||
| Interest expense as percentage of average earning assets | 0.99% | 1.43% | ||||||||||
| Net interest margin | 3.84% | 3.55% | ||||||||||
| (1) Income and yields are reported on a taxable equivalent basis using a 35% tax rate. | ||||||||||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||||
| FINANCIAL INFORMATION - FOUR QUARTER TREND (UNAUDITED) | ||||||||
| (Dollars in thousands, except per share data) | ||||||||
| 2011 | 2010 | |||||||
| Quarter Ended | ||||||||
| June 30, | March 31, | December 31, | September 30, | |||||
| Interest income | $ 30,369 | $ 30,306 | $ 31,710 | $ 31,582 | ||||
| Interest expense | 6,326 | 6,443 | 6,950 | 8,048 | ||||
| Net interest income | 24,043 | 23,863 | 24,760 | 23,534 | ||||
| Provision for loan losses | 3,150 | 4,500 | 5,300 | 3,500 | ||||
| Total net interest income after provision | 20,893 | 19,363 | 19,460 | 20,034 | ||||
| Non interest income | 7,521 | 7,670 | 7,827 | 8,247 | ||||
| Non interest expense | 23,220 | 23,536 | 23,956 | 23,665 | ||||
| Income before income taxes | 5,194 | 3,497 | 3,331 | 4,616 | ||||
| Provision for income taxes | 1,169 | 626 | 502 | 1,088 | ||||
| Net income | $ 4,025 | $ 2,871 | $ 2,829 | $ 3,528 | ||||
| Preferred stock dividends | (354) | (370) | (378) | (378) | ||||
| Accretion of preferred stock discount | (366) | (95) | (94) | (92) | ||||
| Net income available to common shareholders | $ 3,305 | $ 2,406 | $ 2,357 | $ 3,058 | ||||
| Net income per share | ||||||||
| basic | $ 0.15 | $ 0.11 | $ 0.10 | $ 0.13 | ||||
| diluted | $ 0.14 | $ 0.11 | $ 0.10 | $ 0.13 | ||||
| STELLARONE CORPORATION (NASDAQ: STEL) | ||||||
| SEGMENT INFORMATION (UNAUDITED) | ||||||
| (Dollars in thousands) | ||||||
| At and for the Three Months Ended June 30, 2011 | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 24,154 | $ 155 | $ -- | $ (266) | $ -- | $ 24,043 |
| Provision for loan losses | 3,150 | -- | -- | -- | -- | 3,150 |
| Noninterest income | 5,747 | 1,565 | 1,353 | 26 | (1,169) | 7,521 |
| Noninterest expense | 21,388 | 1,636 | 1,162 | 203 | (1,169) | 23,220 |
| Provision for income taxes | 1,248 | 25 | 57 | (161) | -- | 1,169 |
| Net income (loss) | $ 4,115 | $ 59 | $ 134 | $ (283) | $ -- | $ 4,025 |
| Total Assets | $ 2,905,049 | $ 21,019 | $ 537 | $ 462,668 | $ (453,832) | $ 2,935,441 |
| Average Assets | $ 2,894,549 | $ 14,775 | $ 406 | $ 461,782 | $ (453,166) | $ 2,918,346 |
| At and for the Three Months Ended June 30, 2010 | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 23,171 | $ 311 | $ -- | $ (264) | $ -- | $ 23,218 |
| Provision for loan losses | 7,350 | -- | -- | -- | -- | 7,350 |
| Noninterest income | 6,413 | 1,532 | 1,271 | 213 | (1,048) | 8,380 |
| Noninterest expense | 20,682 | 1,674 | 961 | 523 | (1,048) | 22,791 |
| Provision for income taxes | 19 | 51 | 93 | (260) | -- | (96) |
| Net income (loss) | $ 1,534 | $ 118 | $ 217 | $ (315) | $ -- | $ 1,553 |
| Total Assets | $ 2,925,922 | $ 43,564 | $ 499 | $ 462,512 | $ (444,712) | $ 2,987,785 |
| Average Assets | $ 2,935,245 | $ 31,839 | $ 156 | $ 460,568 | $ (442,855) | $ 2,984,954 |
| At and for the Six Months Ended June 30, 2011 | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 48,033 | $ 400 | $ -- | $ (527) | $ -- | $ 47,905 |
| Provision for loan losses | 7,650 | -- | -- | -- | -- | 7,650 |
| Noninterest income | 11,391 | 3,440 | 2,692 | 51 | (2,383) | 15,191 |
| Noninterest expense | 42,943 | 3,541 | 2,255 | 399 | (2,383) | 46,755 |
| Provision for income taxes | 1,893 | 89 | 131 | (318) | -- | 1,794 |
| Net income (loss) | $ 6,939 | $ 209 | $ 306 | $ (557) | $ -- | $ 6,897 |
| Average Assets | $ 2,885,277 | $ 19,701 | $ 287 | $ 463,038 | $ (453,988) | $ 2,914,316 |
| At and for the Six Months Ended June 30, 2010 | ||||||
|
Commercial Bank |
Mortgage Banking |
Wealth Management |
Other |
Intersegment Elimination |
Consolidated | |
| Net interest income | $ 47,767 | $ 666 | $ -- | $ (2,716) | $ -- | $ 45,717 |
| Provision for loan losses | 7,650 | -- | -- | 6,400 | -- | 14,050 |
| Noninterest income | 11,648 | 3,412 | 2,463 | 1,793 | (2,121) | 17,195 |
| Noninterest expense | 43,354 | 3,437 | 1,948 | (1,280) | (2,121) | 45,338 |
| Provision for income taxes | 1,767 | 192 | 154 | (1,997) | -- | 116 |
| Net income (loss) | $ 6,644 | $ 449 | $ 361 | $ (4,046) | $ -- | $ 3,408 |
| Average Assets | $ 2,941,604 | $ 32,731 | $ 176 | $ 460,021 | $ (442,605) | $ 2,991,928 |